QUARTERLY IR UPDATES 4 th Quarter 2019 Financial Results & Updates 12 th February 2020 1
Disclaimer This Presentation is not intended to form the basis of any investment decision with respect to Malaysia Marine and Heavy Engineering Holdings Berhad (MHB). Neither this presentation nor anything contained herein shall form the basis of, or be relied upon in connection with, any contract or commitment whatsoever. No representation or warranty, express or implied, is or will be made by MHB in relation to, and no responsibility or liability is or will be accepted by MHB as to the accuracy and completeness of, the Information made available, and any liability therefore is expressly disclaimed. This Presentation may contain “forward-looking statements”. Forward-looking statements by their nature involve known and unknown risks, uncertainties and other factors that are in many cases beyond MHB’s control. Although MHB believes that the expectations of its management as reflected by such forward-looking statements are reasonable based on information currently available to it, no assurances can be given that such expectations will prove to have been correct. Accordingly, you are cautioned not to place undue reliance on such forward-looking statements. In any event, these statements speak only as of their dates, and MHB undertakes no obligation to update or revise any of them, whether as a result of new information, future events or otherwise. This Presentation and its contents are strictly confidential and must not be copied, reproduced, distributed, summarized, disclosed referred or passed on to others at any time without the prior written consent of MHB. Except for the yard facilities in the photographs, none of the vessels/structures belong to MHB. 2
1 Business Highlights Projects Financials Shareholding Information Key Focus Areas 3
Key Highlights in FY2019 FINANCIALS • Revenue of RM1.0 bil • Pre-tax loss of RM39.8 mil HEAVY ENGINEERING UNIT (HEU) MILESTONES: • Awarded with Construction and Commissioning of Golden Star External Turret • Sail away of Gumusut-Kakap Phase II Extension Subsea Manifold • Awarded an EPCIC of central processing platform (CPP) and wellhead platform (WHP) for the Kasawari Gas Development project • Completion of RAPID Package 3 Area 2 • Completion of RAPID Package 14 • Awarded an EPCC of Bergading Mercury Removal Unit (MRU) module for Bergading Central Processing Platform (CPP)-MRU Integration Project • Awarded an EPCIC of supply and installation of new BEDP-A and BEDP-B WHP For Bekok Oil Project MARINE BUSINESS UNIT (MBU) MILESTONES: • Completed repair & maintenance of 77 vessels • Secured 86 jobs 4
Business Highlights 2 Projects Financials Shareholding Information Key Focus Areas 5
Progress is at 73.31% as of December 2019 Bokor Phase 3 Re-Development CPP 6
Progress is at 87.25% as of December 2019 Pluto Water Handling Module 7
Progress is at 62.94% as of December 2019 Golden Star External Turret 8
Progress is at 4.61% as of December 2019 Kasawari 9
Progress is at 13.87% as of December 2019 MRU-Integration 10
Notable Marine Repair Projects Delivered in Q4 2019 – Gas (1/2) LNG Shen Hai LPG Gas Summit Vessel owner: KSS Lines Ltd Vessel owner: China LNG Shipping (International) Co. Ltd. Deadweight: 86,625 tonnage Deadweight: 54,684 tonnage Job scope: Drydocking and Repairs Job scope: Drydocking & Repairs and Scrubber Retrofitting 28 th October 2019 16 th November 2019 Delivery date: Delivery date: 11
Notable Marine Repair Projects Delivered in Q4 2019 – Gas (2/2) LNG FSU Tenaga Satu Vessel owner: MISC Berhad Deadweight: 71,814 tonnage Job scope: Manifold Modification 12 th December 2019 Delivery date: 12
Notable Marine Repair Projects Delivered in Q4 2019 – Non-Gas SK Splendor FPSO Ledang Vessel owner: SK Shipping Co. Ltd. Vessel owner: MTC Engineering Sdn.Bhd Deadweight: 75,154 tonnage Deadweight: 27,031 tonnage Job scope: Drydocking & Repairs and Cargo Tank Repair Job scope: FPSO Conversion 28 th October 2019 27 th November 2019 Delivery date: Delivery date: 13
Docking Essential Defect (DED) for KD GEMPITA Notable MMHE EPIC Marine & Services Sdn Bhd (MEMS) Projects 14
Progress is at 86.11% as of December 2019 Dry Dock 3 (DD3) 15
Business Highlights Projects Financials 3 Shareholding Information Key Focus Areas 16
Financial Updates Income Statement, Sequential Quarter Income Statement (RM 'm) 4Q 2019 3Q 2019 Revenue 275.6 254.3 • Revenue Heavy Engineering 148.5 152.8 Marine • Increased revenue from Marine segment 127.1 101.5 Operating Profit/(Loss) 1.6 (4.9) Heavy Engineering (10.3) (6.8) • Operating Profit/(Loss) Marine 5.2 2.5 • Reported operating profit in tandem with the higher Others 6.8 (0.5) revenue and improved performance in the Marine segment Finance Cost - 0.4 • Pre-Tax Profit Share of Results of JV 1.3 - • Reported pre-tax profit mainly due to improved performance in the Marine segment Pretax Profit/(Loss) 3.0 (4.5) Taxation 6.4 (0.3) Net Loss 9.4 (4.7) EPS/(LPS) 0.6 sen (0.3) sen Note : Due to rounding, numbers may not tally with the total 17
Financial Updates Income Statement, Year-on-Year • Revenue Income Statement (RM 'm) 12M 2019 12M 2018 • HEU – Lower revenue from post sail-away projects as Revenue 1,009.5 974.4 most have reached their tail end in the prior year. Heavy Engineering 578.6 651.5 • MBU – Increase in revenue mainly from higher dry Marine 430.9 322.9 docking services on LNG carriers and conversion work Operating Profit/(Loss) (41.1) (126.2) • Operating Profit/(Loss) Heavy Engineering (60.8) (39.0) • HEU – Higher operating loss as a result of lower revenue Marine 8.5 (81.7) and higher unabsorbed overheads Others 11.5 (5.4) • MBU – Recorded operating profit in tandem with the revenue growth and lower unabsorbed overheads Finance Cost - (0.9) • Share of Results of JVs Share of Results of JV 1.3 3.0 • Profit of RM1.3 million mainly contributed by the Pretax Loss (39.8) (124.1) settlement of projects in the joint ventures Taxation 5.5 (0.1) • Pre-Tax Loss • Lower pre-tax loss due to better performance in the Net Loss (34.2) (124.2) Marine segment LPS (2.1) sen (7.7) sen Note: 1. Segmental Revenue and Operating Profit is post inter-segment eliminations 2. Due to rounding, numbers may not tally with the total 18
Financial Updates Balance Sheet Balance Sheet (RM 'm) Dec 2019 Dec 2018 Non-Current Assets 2,034.9 1,905.5 Inventories 4.4 5.6 Receivables 502.3 648.0 • Total assets of RM3.2bil Cash 671.9 601.5 Others 2.6 20.6 Higher Non-Current Assets – Increase in PPE Total Assets 3,216.1 3,181.2 Higher Non-Current Liabilities – Mainly due to disbursement of loan for the construction of Dry Shareholders' Funds 2,372.3 2,407.1 Dock No. 3 Non-Controlling Interests 9.2 (0.3) Higher Cash – Increase in net cash generated from operating activities Long Term Loan 178.9 48.4 Long Term Lease Liabilities 8.6 - • NTA per share of RM1.49 Payables 643.5 726.0 Short Term Lease Liabilities 2.0 - Derivatives 1.6 - Total Equity & Liabilities 3,216.1 3,181.2 NTA per share RM1.49 RM1.50 Note : Due to rounding, numbers may not tally with the total 19
Backlog & Order Intake Backlog RM (‘000) 3,500 MHB Backlog as of 31 December 2019 3,000 2,500 2,000 1,500 2,958 Heavy Engineering 1,000 Unit 96.9% 1,273 500 1,023 785 629 0 Dec15 Dec16 Dec17 Dec18 Dec19 RM2,957.9 mil New Order Intake RM (‘000) 2,500 2,000 1,500 2,644 1,000 Marine Business 1,145 500 Unit 652 3.1% 182 144 0 Dec15 Dec16 Dec17 Dec18 Dec19 Note: New Order Intake excludes Marine Business segment 20
Business Highlights Projects Financials 4 Shareholding Information Key Focus Areas 21
Corporate Updates Shareholding Information & Share Price Share Price (RM) 5.33% 2.00 9.81% 1.80 8.50% 1.60 As of 31 Dec 2019 0.82 6.60% 1.40 07/10/2019 3.26% 1.20 66.50% 5.33% 10.72% 1.00 0.80 8.50% As of 0.60 30 Sep 2019 0.92 6.60% MISC 0.40 14/10/2019 Foreign Investors 2.35% 66.50% 0.20 Urusharta Jamaah 0.00 Technip 1/Oct/19 1/Nov/19 1/Dec/19 31/Dec/19 Other Malaysian Shareholders Others Note: Others include the following: Sep-19 Dec-19 Lembaga Tabung Angkatan Tentera 2.23% 2.23% Amanah Trustees 1.50% 1.50% EPF 1.60% 1.60% 22
Business Highlights Projects Financials Shareholding Information Key Focus Areas 5 23
Key Focus Areas • HEU tenders worth ~ RM12.89 billion have been submitted as of December 2019 • Strategy & Initiatives Continue pursuing existing business of Marine & Heavy Engineering and expanding marine capacity through additional dry dock Continue exploring new business opportunities namely modular fabrication and offshore wind farm Reinforce internal process control and strengthening project planning Implement productivity improvement initiative to achieve operational efficiency Upskill manpower through capability development programs 24
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